All eyes are on the Union Cabinet which is set to clear the higher allowances and HRA as per the 7th Pay Commission. The Finance Minister will give his nod to the revised allowances from July 18 2017.

While sources say that the Cabinet is expected to set the agenda for the meet by today, the meeting would take place before the end of June. However it is confirmed that the central government employees will get their revised allowances and HRA from July onwards.

Positive news on allowances

The National Joint Council of Action is confident that that revised or higher allowances will roll out from July onwards. It is the right of the employees to get revised allowances, NJCA chief Shiv Gopal Mishra said. The employees are expecting a double bonanza from the Arun Jaitley, the Finance Minister of India.

Doubts on arrears persist

While central government employees will get good news on the revised allowances, doubts persist on the arrears. There is no official confirmation or any sort of clarity with regards to arrears on allowances. Mishra said that there is no confirmation on the arrears. He also added that it is the right of the central government employees to get arrears. There has been an unprecedented delay in this regard, Mishra also added.

Why arrears is being delayed

The Reserve Bank of India had said that granting arrears would lead to inflation. However the NJCA has rejected this. Mishra says if there is going to be an impact on inflation then it is the duty of the RBI to find an alternate solution. The Government of India is an employer. And an ideal employer has to revise wages when required. You cannot tell employees that the wages and allowances would not be revised as we are facing financial hardships,” Mishra said.

Rs 1,02,100 crore allotted

In the Union Budget, Finance Minister, Arun Jaitley had allotted Rs 1,02,100 for the implementation of the 7th Pay Commission. This amount has not been spent entirely. Even if the allowances along with arrears are given, there would be no additional burden on the exchequer.

Cabinet agenda

The Cabinet will take up the matter pertaining to higher allowances and HRA as per the 7th Pay Commission this month. Finance Minister, Arun Jaitley will fix the agenda for the Cabinet to take up the matter this week. However the good news is that the central government employees will start getting their revised allowances and HRA from July 18, 2017 onwards.

The agenda for the Cabinet meet will be fixed this week. Sources say that the Finance Minister would take up the matter on Monday and is likely to fix the agenda on the same day itself. On Monday, according to sources Finance Minister Arun Jaitley is likely to discuss the matter with the Cabinet Secretary and fix and agenda for the next Cabinet meeting. A Union leader who did not wished to be named said that the matter will be taken up soon by the Cabinet.

The suspense will continue through the weekend. However government sources say that the matter will not go unattended. The Finance Minister has gone through portions of the report submitted by the Empowered Committee of Secretaries or E-CoS. It would be examined once again before the Cabinet meeting, the source also added.

Allowance and HRA update

After months of waiting, the over 52 lakh central government employees will start getting their revised allowances, including for house rent allowance or HRA.

The same would be implemented after the pay panel hiked their pays. The delay in the disbursal of revised allowances had saved the exchequer Rs 40,000 crore since January 1 2016. Sources however say that the government would compensate employees for this with a generous HRA, more than what was recommended by the 7th Pay Commission.

The Central government employees have demanded that the HRA must be left unchanged at 30 per cent, 20 per cent and 10 per cent depending on the city where they live. The 7th Pay Commission had recommended that the HRA must be reduced to 24 per cent, 16 per cent and 8 per cent of the basic pay. However the government will be generous and give more HRA than the one recommended.

An increase in House Rent Allowance (HRA) and basic pay was among the major concerns raised at the meeting of Empowered Committee of Secretaries for Central government employees. Although some reports indicated that the a cap of25 per cent and 27 per cent was put on HRA, the Cabinet is likely to reverse that as per the employees’ demands.

The Cabinet will first discuss the hike employees have been asking in the range of157 to 178 per cent is the HRA rates as per the 6th Pay Commission. The existing rates of HRA for Class X, Y and Z cities and towns are 30 percent, 20 percent and 10 percent of Basic pay (pay in the pay band plus grade pay). If the Cabinet retains the existing HRA then the component for central government employees will increase in a range of 157 to 178 per cent.